Peru Declared A State of Emergency of Cuajone Copper Mine, China-Funded Mines Also Suspended the Production

SHANGHAI, Apr 21 - On Wednesday (20 April) local time, Peruvian Prime Minister Anibal Torres said the country would declare a state of emergency in the area where Southern Copper Corporation's Cuajone copper mine locates. Protests across Peru have now hit a number of large copper mines there and have led to 20% of the country's copper production facing disruption.

Peru is the second largest copper producer in the world. Since the beginning of 2022, protests by indigent communities against the operations of mines including Cuajone copper mine, MMR's Las Bambas copper mine and Glencore's Antapaccay copper mine have been increasing in Peru's copper-rich Andes.

These protesters complained that despite the rising international prices of copper, the mineral-generated wealth was not flowing to their communities.

Cuajone copper mine suspended its operations on February 28 after residents of communities near the mine cut off water supply, demanding financial compensation and a share of future profits.

Previously, the Peruvian government under President Castillo had been reluctant to quell protests against Peruvian copper mines. But Peruvian Prime Minister Torres said on Wednesday that the government had no more patience concerning this issue.

Torres said, "The community is asking for $5 billion in aid, which is clearly unreasonable. Hence we decide to declare a state of emergency, and this issue must now be addressed."

In addition to the Cuajone copper mine, MMR's Las Bambas copper mine also ceased the production on Wednesday. MMR (01208.HK) announced on April 19 that due to protests by the local community, the company's Las Bambas copper mine will not be able to maintain production from April 20 for safety reasons. This is the second time of suspension of production of Las Bambas copper mine since 2021.

MMR said that, on April 14, members of the Fuerabamba community in Peru protested against the company's failure to comply with its social investment commitments. MMR rejected the community's allegations and said that the community had not been able to respond to requests from, among others, Peruvian national government agencies to review companies’ compliance with its social commitments in a transparent manner.

Peruvian government officials are meeting with representatives of the Fuerabamba community in an attempt to de-escalate the situation, but no solution had been reached as of Wednesday evening local time. MMR's shares at HKEX sank over 10% to close at HK$3.50 per share on Wednesday.

Also on Wednesday, protests against the planned expansion of Canco's Antapaccay copper mine got underway. However, a source familiar with the company said that the protest spared a key haul road shared by the Antapaccay, Las Bambas and Constancia copper mines.

According to Peruvian government statistics, Peru produced approximately 2.3 million mt of copper in 2021. Among them, output from the Las Bambas copper mine and Cuajone copper mine stood at almost 300,000 mt and around 170,000 mt respectively, which together accounted for around 20% of Peru's national copper production.